A growing number of Twin Cities households are relying on their credit cards to keep their heat and lights on.

At Connexus Energy, the largest electric co-op in Minnesota, credit card use is up 15 percent so far this year. And in August, September and October — a period in which the U.S. economy took a sharp turn for the worse — it rose 30 percent.

The jump isn’t just folks paying with plastic because they want to maximize their rewards points. It also includes people stretching to make ends meet and postponing basic expenses, even utility payments, by using a credit card, financial counselors say.

That’s not a good sign.

“They are struggling to meet their primary expenses and are burdened with debt,” said Tara McCarthy, executive director of Financial Rehabilitation Inc., a Minneapolis nonprofit that provides financial counseling. “By paying with a credit card, it might even be buying them a couple of days to pawn jewelry to make the payments.”

But they’re only putting off the inevitable, she said. Eventually, the debt will catch up to them.

Ramsey-based Connexus has more than 120,000 customers, and its service area includes parts of Anoka, Chisago, Hennepin, Isanti, Ramsey, Sherburne and Washington counties, so it’s a good barometer for what’s going on in the metro area. Sam Neral, a Connexus spokeswoman, said the co-op also has seen more instances of credit cards being declined because the cards were overextended or stolen.

Credit-card payments at Dakota Electric Association, based in Farmington, are up nearly 12 percent year to date compared with the same time last year.

The payment picture at Minnesota’s two largest utilities is less clear.

Officials at Xcel Energy, which serves eight Western and Midwestern states, including 1.2 million customers in Minnesota, said they’ve seen credit- and debit-card transactions jump 11 percent this year over last. Minneapolis-based Xcel’s data doesn’t break out credit-card transactions, however. Debit cards work like credit cards on the front end, but because money is withdrawn immediately from a customer’s bank account, they don’t buy users extra time.

CenterPoint Energy, which serves 790,000 customers statewide, does differentiate between debit- and credit-card payments. The Houston-based utility said credit-card transactions have held steady. Debit-card payments, on the other hand, have more than doubled since last year, perhaps because more customers are substituting them for checks.

But if the economy worsens and unemployment rates rise, financial counselors suspect more people will turn to the plastic in their wallets to pay for electricity and heat.

“When people make a choice to put a bill on their credit card, they are doing it out of necessity and out of fear,” McCarthy said. “They don’t know what else to do.”

Consumers using credit cards as a catchall payment plan are heading down a treacherous path, counselors say.

“When you start putting basic expenses like groceries and utility bills and gas on a credit card because you don’t have the cash, that’s a recipe for disaster,” said Darryl Dahlheimer, manager of financial counseling for Lutheran Social Service in Minnesota.

The hole just gets deeper from there, as customers who don’t pay credit card bills in full each month end up paying interest.

A September poll by Consumer Action, a national consumer advocacy group, found that 33 percent of people surveyed regularly pay their credit-card balances in full. In that same poll, 16 percent of respondents said they use a credit card to make ends meet.

“The second you miss a credit card payment, then you’re in trouble with default interest rates, penalty interest and late fees and possibly over-the-limit fees,” Dahlheimer said. “It’s a short-term patch with long-term pain.”

Leslie Brooks Suzukamo contributed to this report. Nicole Garrison-Sprenger can be reached at 651-228-5580.

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